Nov. 18 (Bloomberg) -- Jonathan Lu’s first job after
college wasn’t what he’d envisioned -- stuck at the reception
desk at a Holiday Inn in Guangzhou, China. He had forgotten to
fill out a page of his university entrance exam and instead of
architecture school, he ended up in a hotel management program.

Alibaba Group Holding Ltd.’s chief executive officer
recounts the story to show his ability to overcome hurdles --
and how in just 15 years he went from greeting hotel guests to
being tapped this February by billionaire Jack Ma to run China’s
largest e-commerce company.

Today, the 43-year-old Lu is charged with guiding the
company through a potential multibillion-dollar initial public
offering, while fending off rivals such as China Internet giant
Tencent Holdings Ltd. and navigating a shift to mobile
computing.

“I get very excited when I face setbacks,” Lu said of his
earlier misadventure. “It stimulates my potential.”

Lu is the corporate alter-ego of Ma, the outspoken Alibaba
founder and visionary who has landed in the headlines for
slamming rivals such as EBay Inc. or, again last week, for
railing against pollution in China that has made water
“undrinkable” and food “inedible.” The slight, soft-spoken
Lu operates largely behind the scenes.

“We complement each other very well,” Lu said. “He looks
forward and outside of the box, I focus on the present.”

IPO

Alibaba is heading for an IPO that may make it the world’s
most valuable Internet company after Google Inc. Analysts
estimate the share sale, which may come next year, will value
Alibaba higher than Facebook Inc.’s initial $81 billion and
could see it reach $190 billion, or about 12 percent more than
Amazon.com Inc. now.

In the meantime, Lu will need all his perseverance in
executing Ma’s vision. His job is to develop the equivalent of
an EBay, an Amazon and a PayPal all at the same time -- in a
country where credit card use is rare and traffic jams hamper
deliveries for days.

“A lot of pressure, a lot of things I need to do,” said
Lu, during an interview at Alibaba headquarters in Hangzhou, a
city of 8.8 million people about 100 miles southwest of
Shanghai. “The battle in e-commerce has never stopped because
the cake is too big.”

While the closely held company doesn’t report detailed
financial results, basic figures are made public by Yahoo! Inc.,
which owns a stake. In the second quarter, Alibaba’s revenue
climbed 60 percent to $1.73 billion and net income more than
doubled to $707 million. That’s about the same revenue as
Facebook with more than twice the profit.

‘Ordinary Workers’

Lu grew up in Guangzhou, a trading hub about 75 miles up
the Pearl River from Hong Kong. His father and mother were
“ordinary workers,” he said, declining to be any more
specific.

Lu was in elementary school during the last years of the
Cultural Revolution in the 1970s, when the bloody turmoil of Mao
Zedong’s drive to stamp out capitalist and traditional
influences petered out in economic stagnation and political
infighting. The chairman’s portrait hung at the front of his
classroom, and the first lesson Lu learned was the importance of
class struggle.

After Mao’s death, reformers led by Deng Xiaoping gained
power and opened China’s economy to foreign investment and more
extensive private enterprise.

Serendipitous

Lu, a good student, said he had imagined a bright future
after high school, perhaps as an architect. As it happened,
failing the grade for architects’ school and landing the job at
the Guangzhou Holiday Inn proved serendipitous stepping stones
toward an even brighter future.

Six years after he joined, a foreign guest who had set up
an Internet fax company in the city hired Lu as a service
manager.

The business shut down after a year, and Lu started a
similar firm on his own. In 1999, Alibaba offered to buy his
company.

A year later, Lu began managing the South China sales
region for Alibaba.com Ltd., the company’s website that lets
businesses sell to other businesses. When Ma came to town, Lu
drove him around to meet customers and give speeches across
Guangdong, a province about the size of Florida.

During the long drives, Lu would offer his thoughts on how
to fine-tune sales incentives and other policies, while Ma would
outline the big picture.

Road Trip

“That was a time for us to really get to know each
other,” Lu said. “Him talking and me listening, him sleeping
and me driving.”

Lu became one of the key people Ma would turn to execute
his ideas for building an Internet powerhouse. In 2004, Lu led a
team in developing Alipay, a system for making payments that
ensures the safety of online transactions without credit cards.

“Jonathan was very low key and didn’t like to promote
himself,” said David Feng Dahui, chief technology officer of
medical website DXY.com, who worked for Lu at Alipay. “But you
could tell that he was quite decisive.”

In 2008, Lu was promoted to become CEO of Taobao
Marketplace, a website similar to EBay’s that lets individuals
trade with each other. During his tenure, the service’s
transaction volume grew more than eightfold.

Ma again turned to Lu in 2011 to take the helm of
Alibaba.com, the business-to-business website that at the time
was publicly listed. The previous CEO had resigned after an
internal probe found that more than 2,000 subscribers had
engaged in fraudulent sales. Lu moved quickly to clean up the
site, used by companies such as Wal-Mart Stores Inc. and Procter
& Gamble Co. to find China exporters.

Sets Direction

“He sets the direction and then he’s really able to
empower people to do what they need to do,” said Brian Wong, an
angel investor who used to work for Lu at Alibaba.

Ma bought out the public shareholders in Alibaba.com in
2012, folding the unit back into the parent company. Lu became
chief data officer and oversaw development of a mobile operating
system called AMOS, until he was tapped to become CEO.

Ma’s offer came during tea at the Peninsula hotel on
Shanghai’s historic Bund in February. It wasn’t the first time
Ma had taken Lu out to propose a new job -- -- he’d done it over
drinks, dinner and once as the men got foot massages.

“Ninety percent of the time, it is him talking,” said Lu,
tilting his head with a laugh. “Then I say yes.”

Letter

In a letter to employees in March when Lu’s promotion was
announced, Ma said he was chosen for qualities that included
“his curiosity and ability to grasp new ideas, his judgment and
decisiveness.” Alibaba declined to make the founder, who
remains as executive chairman, available to be interviewed for
this story.

Lu, who got married earlier this year, says he’s ready to
take on a higher profile role as needed.

“Our plan is that Jack doesn’t need to come out so
often,” Lu said. “I will face the public more often, but this
needs time and I also need to improve myself.”

Alibaba hasn’t officially said when it will go public,
though people familiar with the matter said last month it would
happen next year. The company may list in New York after talks
with the Hong Kong exchange broke down, two people familiar said
in September.

Analysts have been steadily increasing estimates of the
company’s value as financial details are disclosed through
Yahoo.

$190 Billion

Alibaba is valued at $120 billion according to the average
estimate of six analysts in October. Carlos Kirjner at Sanford
C. Bernstein lapped the field by doubling his valuation to $190
billion.

He based the figure on a projection that Alibaba’s net
income will climb from $2.6 billion this year to $6.1 billion in
2015, as revenue rises from $6.6 billion to $13.5 billion. A
market value of 30 times 2015 profit is in line with Tencent, he
said.

Lu is taking none of this for granted. The rival he watches
most closely these days is Tencent, a Shenzhen-based company
that’s moved beyond games into Web services, search and e-commerce. Tencent has 990 million registered instant messaging
accounts, and it’s increasingly offering them opportunities to
buy and sell goods, much like Alibaba. Tencent even has its own
Alipay-like service. Its name? Tenpay.

On the strategic front, Lu’s priority is preparing Alibaba
for the shift to mobile computing. The company is working to
make its instant messaging app, Laiwang, more competitive with
Tencent’s WeChat. It’s also developing better apps to let
consumers and companies conduct business from mobile phones.

All of this may just be a warm-up for when investors and
bankers will scrutinize Lu and his lieutenants to see if they’re
worthy of an IPO comparable to Facebook’s.

“You have to believe in yourself,” he said. “Success is
often just the difference between committing and giving up.”